Markets Brace for July CPI Report With Core Inflation in Focus

The US Bureau of Labor Statistics (BLS) will publish the July Consumer Price Index (CPI) data on Wednesday. The report is expected to show a small decline in consumer inflation and core inflation.

The monthly CPI is forecast to rise by 0.1%, following the 0.4% decrease recorded in June, while the annual reading is seen retreating to 3.4% from 3.5% reported in the previous month. Core CPI figures, which exclude volatile food and energy prices, are expected to post an increase of 0.2% and 2.5%, on a monthly and yearly basis, respectively.

Following a nearly 16% drop in May, Crude Oil prices declined roughly 20% in June and came back to pre-war levels, as investors cheered news of the US and Iran reaching a ceasefire on June 17 to start negotiations to bring an end to the conflict. As a result, CPI inflation softened at a much faster pace than expected in June.

US Inflation Seen Rebounding as Services and Core Goods Firm

According to TD Securities, July inflation data are likely to show a modest increase after June's temporary softness. The bank expects that,

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